The Fitch Ratings agency recently upgraded its outlook for Palm Beach Gardens bonds from “stable” to “positive,” citing the city’s strong financial position, an expanding city economy and a moderate debt burden.
The outlook issued Aug. 13 covers $300,000 in general obligation bonds and $14.4 million in public improvement refunding bonds.
Reasons cited for the upgrade include the city’s conservative budgeting practices, consistent operating surpluses and maintenance of high reserves.
Other factors cited by Fitch Ratings in its analysis of Palm Beach Gardens debt include an affluent population, with resident incomes above average for Florida and the nation, as well as “educational attainment standards supporting expectations for continued growth.”
Fitch Ratings said the city has a “fairly diverse” economic base including companies operating in health care, tourism, leisure, engineering and education. It also notes the presence of biotech jobs tied to the Scripps Research Institute and the Max Planck Society on Donald Ross Road.
Police and firefighter pension reforms approved last year to reduce the city’s costs also were cited as positive and “should benefit the somewhat weak-funded status of the city’s pension plans over the longer term,” the rating agency said.
City Finance Administrator Allan Owens said the improved bond rating will enable the city to issue debt at lower rates in the future, meaning it will cost taxpayers less to borrow money for major projects.
“There are also intangibles that come with strong financial ratings, such as the attraction of economic development,” Owens said. “Business and industry leaders desire to be located in financially stable communities.”
Mayor Bert Premuroso said the bond rating upgrade reflects the city’s conservative fiscal policy and the potential for future expansion of the city’s economy.
Premuroso said the city’s strong financial position has already resulted in low annual interest rates of 1.77 percent and 1.89 percent respectively on loans taken out in May to rebuild the city golf course and a fire station.